Shri. Chandrakant S/O Lata ... vs M/S. Devshakti Dal Mill, A ...
2022 Latest Caselaw 8370 Bom

WPs7703-7704.18.odt-Judgment       1/17


         IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                    NAGPUR BENCH, NAGPUR.


              WRIT PETITION NO. 7703          OF 2018


PETITIONERS/ :-     1. Shri Chandrakant S/o Lala Motilal Jaiswal
LANDLORD               aged about 57 years, Occ.: Business,
Original Applicants
before the Rent     2. Shri Rajendra S/o Lala Motilal Jaiswal,
Controller             aged about 55 years, Occ.: Business,

                      3. M/s.     R.M.Traders,     a    registered
                         Partnership Firm, Through its Partner
                         Rajendra S/o Lala Motilal Jaiswal,

                      4. Smt. Shakuntalabai Wd/o Lala Motilal
                         Jaiswal, aged about 84 years, Occ.:
                         Business,

                      5. Smt. Meena W/o Chandrakant Jaiswal,
                         aged about 51 years, Occ.: Business,

                           All R/o. Prashant Nagar, Wardha Road,
                           Nagpur.

                               ...VERSUS...

RESPONDENTS/ :- 1.         M/s. Devshakti Dal Mill, a registered
TENANTS                    partnership firm, Bagadganj, Small
Original Non-              Factory Area, Bhandara Road, Nagpur,
Applicants before the      through its partners.
Rent Controller
                      2.   Smt. Ichrajabai W/o. Dhanraj Oswal
                           (Expired).

                      3. Suresh S/o Dhanraj Oswal, Aged about
                         64 years, Occ.: Business,


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                             4. Smt. Asha W/o Kantilal Oswal, Aged
                                about54 years, Occ.: Business,

                                  All R/o. C/o. M/s. Devshakti Dal Mill,
                                  59, Bagadganj, Small Factory Area,
                                  Bhandara Road, Nagpur.

-------------------------------------------------------------------------------------------
                   Mr. S.P. Dharmadhikari, Sr. Counsel a/b
        Mr.D.G. Paunikar, counsel for the petitioners/landlord.
                       Mr.M.G.Bhangade, Sr.Counsel a/b
        Mr.Dhruv Sharma, counsel for the respondents/tenant.
-------------------------------------------------------------------------------------------

                                          AND

                  WRIT PETITION NO. 7704                    OF 2018


PETITIONERS/ :-     1. Shri Chandrakant S/o Lala Motilal Jaiswal
LANDLORD               aged about 57 years, Occ.: Business,
Original Applicants
before the Rent     2. Shri Rajendra S/o Lala Motilal Jaiswal,
Controller             aged about 55 years, Occ.: Business,

                             3. M/s. R. M. Traders, a registered
                                Partnership Firm, Through its Partner
                                Rajendra S/o Lala Motilal Jaiswal,

                             4. Smt. Shakuntalabai Wd/o Lala Motilal
                                Jaiswal, aged about 84 years, Occ.:
                                Business,

                             5. Smt. Meena W/o Chandrakant Jaiswal,
                                aged about 51 years, Occ.: Business,

                                  All R/o. Prashant Nagar, Wardha Road,
                                  Nagpur.


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                                     ...VERSUS...

RESPONDENTS/ :- 1.                M/s. Devshakti Dal Mill, a registered
TENANTS                           partnership firm, Bagadganj, Small
Original Non-                     Factory Area, Bhandara Road, Nagpur,
Applicants before the             through its partners.
Rent Controller
                      2.          Smt. Ichrajabai W/o. Dhanraj Oswal
                                  (Expired).

                             3. Suresh S/o Dhanraj Oswal, Aged about
                                64 years, Occ.: Business,

                             4. Smt. Asha W/o Kantilal Oswal, Aged
                                about 54 years, Occ.: Business,

                                   All R/o. C/o. M/s. Devshakti Dal Mill,
                                   59, Bagadganj, Small Factory Area,
                                   Bhandara Road, Nagpur.
-------------------------------------------------------------------------------------------
                   Mr. S.P. Dharmadhikari, Sr. Counsel a/b
        Mr.D.G. Paunikar, counsel for the petitioners/landlord.
                       Mr.M.G.Bhangade, Sr.Counsel a/b
        Mr.Dhruv Sharma, counsel for the respondents/tenant.
-------------------------------------------------------------------------------------------
                                   CORAM             : MANISH PITALE, J.
                                  CLOSED ON : 14.07.2022.
                         PRONOUNCED ON : 25.08.2022.
JUDGMENT

Heard.

2. Rule. Rule made returnable forthwith. The writ

petition is heard finally with the consent of the learned counsel for

the rival parties.

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 WPs7703-7704.18.odt-Judgment     4/17

3. The petitioners in these two petitions are landlords

while the respondents are tenants and the dispute between the

parties is about fair rent to which the petitioners are entitled, in

the facts and circumstances of the present case. The petitioners

had initiated proceedings before the Rent Controller under

Clauses 4 and 5 of the C.P. and Berar Letting of Houses and Rent

Control Order, 1949 (hereinafter referred to as "Rent Control

Order") seeking fixation of fair rent at the rate Rs.8/- per sq.ft. for

the tenanted premises. The Rent Controller had partly allowed

the said application. As the landlords as well as the tenants were

aggrieved by the said order, they filed appeals before the Appellate

Authority, wherein the landlords sought an order for the

application being allowed in its entirety, while the tenants sought

quashing and setting aside of the order of the Rent Controller. By

common impugned order dated 21/05/2018, the Appellate

Authority rejected the appeal of the landlords and allowed the

appeal of the tenants, as a consequence of which the landlords

stood deprived of even the partial relief granted by the Rent

Controller. The landlords have consequently filed these two writ

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petitions challenging the common order passed by the Appellate

Authority.

4. The tenanted premises are located at Bagadganj,

Small Factory Area, Bhandara Road, Nagpur. It was the case of

the landlords that from the date of creation of the tenancy, the

rent was increased only once in the year 1975 and that thereafter,

there had been no increase in rent. In this backdrop, on

10/09/1996, the landlords filed the aforesaid application under

Clauses 4 and 5 of the Rent Control Order, seeking fixation of fair

rent at the rate of Rs.8/- per sq.ft. from the date of the application

excluding corporation taxes. The said application was opposed by

the tenants. The parties placed on record pleadings as well as oral

and documentary evidence and thereupon, by order dated

28/08/2015, the Rent Controller partly allowed the application

filed by the landlord, directing that the fair rent of the suit

premises stood fixed at Rs.4000/- per month from 11/09/1996

with a rider of 10% increase every three years, excluding

corporation taxes.

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5. As noted above, aggrieved by the said order of the

Rent Controller, both the landlords as well as the tenants filed

appeals before the Appellate Authority i.e. the Additional

Collector, Nagpur. By common order dated 21/05/2018, the

Appellate Authority dismissed the appeal of the landlords and

allowed the appeal of the tenants. As a consequence, the

application for fixation of fair rent filed by the landlords stood

dismissed. In other words, the landlords were deprived of even

partial relief granted by the Rent Controller.

6. Aggrieved by the said common order passed by the

Appellate Authority, the landlords filed Writ Petition No.7703 of

2018 and Writ Petition No. 7704 of 2018, to challenge dismissal of

their appeal and the appeal of the tenants being allowed.

7. Mr. S.P. Dharmadhikari, learned senior counsel

appearing for the petitioner-landlord in both the petitions

submitted that the pleadings as well as the oral and documentary

evidence placed on record on behalf of the landlords would show

that the application filed for fixation of fair rent ought to have

KHUNTE WPs7703-7704.18.odt-Judgment 7/17

been allowed in terms of the prayer made therein. Attention of

this Court was specifically invited to the evidence of the expert

witness, who stated in detail the basis on which he had

determined the extent to which the rent deserved to be enhanced

for fixation of fair rent. It was submitted that the examination-in-

chief as well as the cross-examination of the said expert witness

would show that sufficient material was indeed placed on record

before the Rent Controller for supporting the prayer for fixation of

fair rent made on behalf of the landlords. By inviting attention to

the order passed by the Rent Controller, it was submitted that

although the landlords believed that the application for fixation of

fair rent ought to have been allowed in its entirety, there was no

reason for the Appellate Authority to have interfered with the

order of the Rent Controller. It was submitted that when the

material available on record demonstrated that the expert had

based his calculations on ready reckoner, the Appellate Authority

could not have interfered with the order of the Rent Controller in

a casual manner. The approach adopted by the Appellate

Authority was criticized on the ground that there was hardly any

KHUNTE WPs7703-7704.18.odt-Judgment 8/17

discussion on the relevant material, while appreciating the

findings of the Rent Controller.

8. The learned senior counsel appearing for the

landlords relied upon Division Bench judgment of this Court in the

case of The Board of Trustees of the Port of Bombay v. Jayantilal

Dharamsey etc., reported in AIR 2001 Bom. 26, to contend that

fixation of fair rent could certainly be done on the basis of

material indicating fair market value of the property in question. It

was submitted that when cogent material was indeed placed on

record by the landlords, there was no reason for the Rent

Controller not to have allowed the application in its entirety and

that there was certainly no reason for the Appellate Authority to

have interfered with at least the partial relief granted by the Rent

Controller.

9. On the other hand, Mr. M.G. Bhangde, learned senior

counsel appearing for the respondents-tenants, submitted that the

pleadings in the application moved on behalf of the landlords for

fixation of fair rent were wholly deficient and defective to justify

KHUNTE WPs7703-7704.18.odt-Judgment 9/17

grant of prayer made in the said application. By referring to

clauses 4 to 10 of the Rent Control Order, it was submitted that

the pleadings were insufficient to justify the prayer made in the

said application. As regards the emphasis placed on behalf of the

landlords on the evidence of the expert witness, as also ready

reckoner, it was submitted that as per settled law, such ready

reckoner or circle rate could not be the basis for seeking

enhancement of rent because such material could not be said to be

a valid basis for determining the true market value of the

concerned property.

10. The learned senior counsel placed reliance on

judgments of the Hon'ble Supreme Court in the case of Special

Land Acquisition Officer and another v. Sidappa Omanna Tumari

and others, reported in 1995 Supp (2) SCC 168, Lal Chand v.

Union of India and another, reported in (2009) 15 SCC 769 and

Sughar Singh v. Hari Singh (Dead) Through LRs and others,

reported in 2021 (12) SCALE 638, as also judgment of Division

Bench of this Court in the case of Kamalkant Natwarlal Shah v.

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Jagdishchandra Natwarlal Shah and others, reported in 2014 (1)

Mh.L.J. 152.

11. Heard learned senior counsel for the rival parties and

perused the material on record. A perusal of the relevant clauses

of the Rent Control Order shows that an application for fixation of

fair rent can be moved by the landlord and factors for determining

such fair rent are indicated in the said clauses of the Rent Control

Order. Much emphasis was placed on behalf of the tenants on the

contents of the application moved by the landlords, to emphasize

that if the pleadings were to be construed, the basis for seeking

fixation of fair rent appeared to be increase in taxes over the

years. By placing emphasis on clause 10 of the Rent Control Order,

it was claimed that the landlords could seek increase in rent by an

amount equal to the amount by which the tax had increased. It

was submitted that no details were forthcoming in the application

as regards the said aspect of the matter and further that the rate of

Rs.8/- per sq.ft. was simply stated in the application, without

supporting pleadings or material.

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12. This Court has perused the pleadings in the

application of landlords, as well as the reply filed on behalf of the

tenants. The oral evidence led by the parties was also perused. It

is found that an expert, i.e. an Architect was examined on behalf

of the landlords in support of the prayer made in the application.

The said expert witness stated that while determining the fair rent

for the property in question, he had taken into consideration the

area of the premises and relied upon the ready reckoner prepared

by the State Authorities. In the cross-examination, the expert

witness stated that he had also taken into consideration the

expected price that the property in question would fetch,

indicating that the prevalent market value or prevailing market

selling rate of the land was the basis. The said witness also

responded to the question as to the manner in which the

prevailing rate of Rs.8/- per sq.ft. was calculated.

13. Much emphasis was placed by the learned senior

counsel appearing for the tenants on the aforementioned

judgments of the Hon'ble Supreme Court and this Court to

contend that ready reckoner could never be a sound basis for

KHUNTE WPs7703-7704.18.odt-Judgment 12/17

determining the market value of the property in question and

hence, fixation of fair rent on that basis would not be justified.

But, a perusal of the said judgments indicates that the judgment in

the case of Special Land Acquisition Officer v. Sidappa Omanna

Tumari (supra) and Lal Chand v. Union of India (supra) arose

from land acquisition proceedings. In the said cases, the Court

was concerned with payment of just and fair compensation to the

claimants and in that context the basis for determination of

market value was examined.

14. In the case of Special Land Acquisition Officer v.

Sidappa Omanna Tumari (supra), it was emphasized that

valuation report prepared by an expert could be of assistance in

determining the market value if the factual data or material is

produced before the Court and it is proved to be reliable like any

other evidence. The determination of the expert in the present

case was on the basis of ready reckoner issued by the State

Authorities itself. In the cross-examination of the expert witness

in the present case, no questions were put on behalf of the

respondents-tenants indicating either that the opinion of the

KHUNTE WPs7703-7704.18.odt-Judgment 13/17

expert was based on no material or that the ready reckoner was

itself suspect. The nature of cross-examination of the expert

witness in the present case would show that it was limited to

asking questions as regards the manner in which the expert had

rendered his opinion/findings. It appears that the cross-

examination on behalf of the tenants was more on the line as to

what was the basis for the expert giving his opinion on the

prevailing market selling rate of land and no real attempt was

made to doubt the genuineness of the material, including the

ready reckoner.

15. A Division Bench of this Court, in the case of

Lokhandwala Infrastructure Pvt. Ltd. Vs. Municipal Corporation of

Greater Mumbai 2008 SCCOnline Bom 717, has taken judicial

notice of the fact that rates stated in the ready reckoner provide

the minimum price to be considered for stamp duty. It is for this

reason that when Courts consider the fair and just compensation

to be paid to claimants in cases concerning land acquisition, only

the ready reckoner is seldom taken as the basis for determination

of true market value. The Court is more concerned about the

KHUNTE WPs7703-7704.18.odt-Judgment 14/17

actual market value, which is found to be higher than such ready

reckoner rates. It is in this context that Courts have made

observations about the reliability of the ready reckoner as the true

basis for determination of the market value of the property in

question. The observations made by the Hon'ble Supreme Court

in the case of Lal Chand v. Union of India (supra) have to be

considered in that light. The ready reckoner assists the

Authorities of the State including Registration Authorities to

examine whether transactions concerning properties are showing

unreasonably low rates, thereby indicating that there is possibility

of undervaluation, only to avoid liability to pay appropriate stamp

duty. It is in this context, that while considering the cases

regarding just and fair compensation payable to claimants in the

context of land acquisition, that the Hon'ble Supreme Court in the

aforesaid judgments has made the said observations.

16. It is in this context, that the observations made by the

Division Bench of this Court in the case of Kamalkant Natwarlal

Shah v. Jagdishchandra Natwarlal Shah (supra) are also to be

appreciated. It has been observed that the ready reckoner cannot

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be recorded as the accurate market value of the property. But, if

there is any doubt regarding the same raised by the tenant or if a

dispute is raised, only then the further question about genuineness

of the material would become relevant. Such is not the case in the

present matter. Therefore, reliance placed on behalf of the

landlords on the judgment of the Division Bench of this Court in

the case of The Board of Trustees of the Port of Bombay v.

Jayantilal Dharamsey etc. (supra) is justified.

17. Even otherwise, a Division Bench of this Court in the

case of Megh Reality and Developers Pvt. Ltd. Vs. Learned Joint

Registrar 2022 SCCOnline Bom 1539, has held that although

ready reckoner cannot be the sole basis for determining the

market value, but it could be an indicator of the approximate

value of the land. To that extent, the tenants in the present case

are not justified in claiming that there were serious deficiencies in

pleadings and evidence to seek any enhancement in the rent.

18. This Court finds that on the basis of the pleadings and

the evidence available on record, the Rent Controller had reached

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a reasonable finding, while partially granting relief to the

landlords. But, a perusal of the common impugned order shows

that the Appellate Authority recorded its findings in paragraph 8.

While rendering findings against the landlords and in favour of

the tenants, the Appellate Authority held that no documentary

evidence was produced by the landlords to substantiate their claim

for fixation of fair rent and that the Rent Controller was not

justified in granting even partial relief to the landlords. There was

no analysis of the pleadings or the evidence and the material on

record, while reversing the findings rendered by the Rent

Controller. It was simply observed that the burden was on the

landlords to prove as to how much rent were similar premises

fetching when the application for fixation of fair rent was moved.

But, the pleadings and evidence placed on record on behalf of the

landlords was not even referred to, while passing the impugned

common order.

19. This Court is of the opinion that no case was made

out by the tenants for interference with the order passed by the

Rent Controller, which granted partial relief to the landlords and

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the appeal filed by the tenants was erroneously allowed. On the

basis of the material available on record, there was no basis for

interfering with the partial relief granted to the landlords and

hence, the impugned common order deserves interference to that

extent.

20. In view of the above, the impugned common order is

set aside to the extent that it allowed the appeal filed by the

respondents-tenants bearing Appeal No.8/A-71(1)/2015-16. The

said appeal filed by the tenants is dismissed and the order of

dismissal of the appeal filed by the landlords bearing Appeal

No.4/A-71(1)/2015-16 is not interfered with. Accordingly, the

order passed by the Rent Controller granting partial relief to the

landlords is restored.

21. Rule is made absolute in the above terms. No costs.

JUDGE

KHUNTE Digitally signed byRAVIKANT CHANDRAKANT KOLHE Signing Date:25.08.2022 18:10